Visa Allows Surcharging; Why You Should Think Twice Before You Surcharge

Beginning Monday business owners  are going to be deluged by sales people offering to make their credit card processing more profitable by adding 'surcharging' to their processing account.

And while it's true that as of Monday Visa has changed it's rules so that it is no longer against the card rules to add surcharges to credit transactions- to add a $1.00 fee to each card you process to cover your processing costs, for example- it is not a cut and dried situation.

First of all, surcharges are illegal in Kansas and Oklahoma by state law. Secondly, Visa's instituted  a myriad of rules and regulations that you must follow if you are going to add surcharges- it can only be done on credit transactions, not debit, you have to follow guidelines that tell you how much you are allowed to surcharge, and several others. The regulations that accompany surcharging are complicated, and I suspect that Visa will be watching very closely for a few months and coming down hard on violators, whether they intended to break Visa's rules or not.

And thirdly, I would urge you to really consider whether you should be surcharging at all. Your customers are not going to like it. Unless you think it wise to anger a broad section of your customer base you may not want to participate.

If you genuinely feel you are paying too much for your credit card processing and have to recoup some of those costs (and if that is the case you need to redo your processing agreement) there is a better option- you can always offer a small cash discount. That will encourage more customers to pay with cash, and allow you to cover some of the costs accrued when customers do pay with credit. (Just remember to adjust your pricing accordingly.)

If you are in a state where surcharging is illegal and someone claims it isn't or has a way to get around the law, contact me immediately. I'll get you the law's title number and exact wording- you don't want to be breaking the law. And if anyone has any questions or concerns about the rules and regulations that Visa has in place, feel free to contact me anytime.